TAYLOR: Winning ship deal not end of story

Nova Scotia politicians are holding their breath, hopeful the expected economic dividend from the federal shipbuilding program will be delivered.

But there must be some concern after The Chronicle Herald reported this week that Irving Shipbuilding Inc. will be contracting out the majority of design and engineering work for the ships.

According to former Irving Shipbuilding employees, the ship designs will be contracted to Odense Maritime Technology of Denmark and General Dynamics Bath Iron Works of Maine, although that has not yet been confirmed.

Cutting steel and welding the components together at the Irving-owned Halifax Shipyard, while it provides important immediate employment, is but one small part of building a modern warship.

The potential for Nova Scotians to gain high-tech expertise in areas such as the art of designing a modern Arctic and offshore patrol vessel is the real long-term benefit of the shipbuilding program for this province.

The article by Paul McLeod, The Chronicle Herald’s Ottawa reporter, casts doubt on whether Nova Scotia will gain all that it could from the work.

Initially, it was expected that much of the design work would be carried out in this province, possibly by Irving’s own engineering team. But there has been a dramatic shakeup in the company’s engineering department recently after Irving demanded a pay cut, according to the former employees.

As a result, the former employees, who asked not to be named in the article, say Irving slashed its team to four engineers from about 14.

There must be some concern within the Dexter government, which has contributed millions in taxpayer dollars to support Irving, that it may not get a full return on its investment.

As a privately held company, Irving Shipbuilding is notoriously close-mouthed when it comes to talking about its business, especially when it is about to sign contracts, and this case is no exception.

About $9.3 million in preparatory work was completed last month, and it has been reported the so-called definition contract, worth hundreds of millions of dollars, is about to be signed.

Perhaps, until we know for sure, Irving Shipbuilding should be given the benefit of the doubt. It is possible it doesn’t have the expertise available in house to design the ships at the price demanded by Ottawa.

Irving cannot risk losing the federal contract to build the ships. It would be a disaster for the company and the province.

Importing design expertise may be necessary to get construction in the $25-billion 30-year program started, but Irving should use the lure of the lucrative contracts to bring some of that expertise back to Canada.

As provincial government officials are fond of saying these days, “If 25 ships are all Nova Scotia gets from the shipbuilding contract, the province will have missed the boat.”

The opportunity for Nova Scotians to learn new skills and develop new technology is the stated long-term goal for the province. And the potential of missing out on important aspects of the job cannot be ignored.

People who say that industries cannot be built around federal defence contracts are wrong. One need only look to the United States for numerous examples. Boeing and the U.S. aviation industry in general have been built largely due to lucrative defence contracts over the years.

It may still be possible that a shipbuilding centre of excellence could be built in Nova Scotia around the backbone of the shipbuilding program.

To do that, Nova Scotia needs to be supportive of Irving Shipbuilding while at the same time pushing the company to consider the long-term goals of the province where it is based.